Chinese investments in the Zambian textile and clothing industry and their implications for development.

[摘要] ENGLISH ABSTRACT: This thesis is a contribution to the 'China in Africa debate. Chinese development assistanceincludes Foreign Direct Investment (FDI), and recent literature argues a significant proportion ofFDI goes to the manufacturing sector in African countries. FDI allocated to industry have thepotential to create employment and reduce poverty.This paper takes Zambia as a case, and looks at the textile and clothing industry as a sub- sector ofthe manufacturing sector. The textile and clothing industry is seen as especially appropriate forZambia, as it; (i) adds value to natural resources; (ii) creates links to other sectors of the economy;(iii) require only basic skills; and (iv) is labour intensive.Based on primary and secondary data, this paper seeks to understand how Chinese FDI in theZambian textile and clothing industry impact economic development, measured by; (i) formalemployment creation; (ii) technology and skill transfer; (iii) state revenue; and lastly (iv) marketcreation of the products.Through looking at Zambian national plans and institutions, the cotton-textile-garment value chainand the organisation of Chinese companies in Zambia, this paper found currently no textile andclothing manufacturing under Chinese investors. Although, cotton quality in Zambia has improved,the majority is exported out of the continent. There are currently few textile mills left and theclothing manufacturers largely use imported inputs. Second hand clothes and cheap imports fromAsian countries, have taken over large parts of the domestic market for textile and clothing inZambia.The largest integrated textile mill was the Zambia China Mulungushi Textiles (ZCMT) operatingunder Chinese investors between 1997 and 2007. Findings show that the Chinese managementcasualised the workforce, leading to more informal employment. In addition, there were fewrecords of skill transfer to Zambian workers, although there were investments in improvingtechnology. This paper explores the different reasons for the TC mill to close and argue that it wasnot viable under a liberal market. The Zambian workers were unhappy with the labour system,wage levels and terms of employment, which caused violent riots and strikes up until closure in2007. The Chinese management was unable to restructure the work force enough to be cost effective and to stay in business. The Lusaka East Multi Facility Economic Zone (MFEZ) is underconstruction, and will focus on textiles and the supportive links in the industry. It is yet to be seen,how it impacts local economic development. Based on the assumptions of economic development,this paper shows limited impact of Chinese FDI in the Zambian textile and clothing industry.

[发布机构] Stellenbosch University